Turkey’s military operation to strain economy regardless of sanctions

When U.S. Vice President Mike Pence clinched a deal with Turkey last week for a 120-hour halt to Turkey’s military operation in northeast Syria, it was Turkish President Recep Tayyip Erdoğan’s convoluted approach in the run-up to negotiations that defined the process.

The chaotic situation unleashed by the military operation has heightened the risk of sanctions on Turkey from both the United States and Russia, which up to now had been working closely with Ankara.

Erdoğan had responded to calls from the United State and the European Union for a ceasefire with Kurdish-led militias across the border by saying he did not negotiate with terrorists and vowing to continue to operation until he had completely cleared the groups from what he calls a safe zone running 32 km deep, south of Turkey’s border with Syria.

Once Pence and Secretary of State Mike Pompeo were en route to Ankara to negotiate a deal, Erdoğan told reporters he would not meet them. Several hours later, the president reversed course again, saying he would.

At the same time as Pence and Pompeo set out for Ankara, the New York Southern District’s Chief Prosecutor Geoffrey Berman revealed that Turkey’s state-run Halkbank had been indicted for breaking U.S. sanctions on Iran more than six years ago.

While this was taking place, U.S. lawmakers were introducing three bills demanding tough sanctions on Erdoğan, his family and Turkey.

To top all of these off, a tactless letter sent by U.S. President Donald Trump urging Erdoğan to make a deal with SDF commander Mazloum Kobani and not to “be a fool” on the day Turkey launched its operation was leaked to the press just before Pence’s delegation set off.

The tone and content of the letter were both deeply insulting, and it was striking that Erdoğan and his spokesmen allowed it to go unanswered.

Turkey’s opposition has criticised Erdoğan both for the series of U-turns leading to his deal and for agreeing to it despite the insults from Washington.

But of more importance now is Erdoğan’s meeting with Russian President Vladimir Putin on Tuesday, hours before the 120-hour ceasefire comes to an end.

While Turkey’s military has already pressed forward in a portion of the border areas between the towns of Tel Abyad and Ras al Ain, Turkish Foreign Minister Mevlüt Çavuşoğlu has said the fate of the key towns of Kobani and Manbij will depend on talks with Russia.

Top Russian officials including Putin and Foreign Minister Sergey Lavrov have insisted Erdoğan should deal with Syrian President Bashar Assad, whose government they have backed throughout the eight-year Syrian conflict.

This would mean returning control of the border to Assad’s government, in return for guarantees that the Kurdish groups will not launch any attacks on Turkey from Syria.

Yet that deal, the Russians say, would also mean giving up on Erdoğan’s plan to build new settlements for the resettlement of Syrian refugees on the Syrian side of the border.

After Turkey launched its operation and Washington announced a full withdrawal of U.S. forces from Syria, U.S. troops turned Manbij and other areas under their control not to Turkey but to Assad, indicating that Washington and Moscow were jointly managing the process.

It is likely with this in mind that Erdoğan promised to relaunch the operation if the SDF fails to meet his conditions once the 120 hours ends on Tuesday. The Turkish president has also said that he would discuss with Putin the presence of Assad’s forces in some areas of the 444 km long, 32 km deep zone envisaged by Turkey.

These statements can be seen as a refusal to Putin’s entreaty to negotiate with Assad. This raises the possibility of sanctions from Russia.

Alongside the Halkbank case and possible U.S. sanctions, this could prove unbearable for Turkey’s economy, which the 2020 budget announced on Oct. 17 shows is already in dire straits.

Despite the injection of some 80 billion liras from the central bank into the Treasury this year, the budget still forecasts a budget deficit of nearly 140 billion liras ($24 billion) in 2020.

A striking part of the deficit is tied to Turkey’s defence budget, which has increased by 39 billion liras to 141.1 billion liras ($24.8 billion) since the 2019 budget.

Naci Ağbal, a chief budget and strategy adviser at the presidency, has said this amount could increase further due to Turkey’s military operations.

The opinions expressed in this column are those of the author and do not necessarily reflect those of Ahval.